Whether you intend to start trading or hold crypto for future investments, a cryptocurrency wallet is essential. So, given your objective, you must understand how to select the best crypto wallet. Wallets are crucial in this industry for owning and investing in cryptocurrencies.
However, with so many good options in 2022, selecting the right wallet can become a chore, especially if you are new to cryptocurrency.
What’s a crypto wallet?
But what exactly is a crypto wallet? It’s your digital wallet where you can store NFT art and cryptocurrency. Crypto wallets, while similar to traditional wallets, do not store your cryptocurrency.
Cryptocurrencies, as you may know, are decentralized. They are not kept in a single location but are recorded as transactions and stored on the blockchain. As a result, crypto wallets are software applications that hold your public and private keys. Sometimes, the software is linked to hardware resembling a USB stick. To put it simply, they are similar to bank accounts. They allow you to track your balance and make transactions from a single location.
How do I know my wallet is safe?
A private key is a string of numbers and letters generated randomly. You can send cryptocurrency to others using your private key. However, you cannot approve transactions without it. As a result, it is critical to keep it as secure as possible. If you lose your private key, you will lose your coins.
The public key is one that anyone can see. A hash is used to generate it from the private key. The public key is your wallet address, and it is used to send cryptocurrencies to your wallet by others. Consider your public key to be your bank account and your private key to be your security code. It is acceptable for others to know your public key but not your private key.
Types of wallets:
First of all, cryptocurrency wallets can be custodial or noncustodial. Custodial wallets are centralized, where a company, such as Binance, holds your public key, private key, and funds while providing you with an interface to manage your cryptos. Keep in mind one general rule regarding crypto exchange: not your keys, not your coins.
Noncustodial wallets are those you manage solely on your own (we highly recommend these). And with that out of the way, We can break crypto wallets into two categories: Software and Hardware.
Now that you understand the fundamentals of your crypto wallet, it’s time to select the best wallet for you. Let’s take a closer look at these and examine some of the most popular crypto wallets available today.
Software wallets are digital applications that you can easily install on your computer, tablet, or smartphone. In other words, these wallets are stored locally on your device. These are encrypted and can be accessed using the user’s private key or seed phrase. Software wallets are easier to use and more accessible with a simple user interface. Enter your password, and you’ll be able to complete transactions in no time.
However, because these wallets are connected to the internet, they are vulnerable to malware or hacker attacks. Put another way. You can have your recovery phrase or password hacked through phishing attacks or other means. So, if you use a software wallet, take all necessary precautions against malicious attacks.
Here are two of the market’s most popular software wallets:
The number one most popular digital wallet among NFT investors is MetaMask. While it was initially only available as a browser extension, it now also has a mobile app. The app has a straightforward interface for collecting and storing NFTs.
Furthermore, MetaMask is simple to set up and includes security features such as secure login and a key vault. In addition, it provides token exchange and token wallet to help you manage your digital assets. It also lets you create an Ethereum wallet, which you can use to connect to any Ethereum-based platform.
MetaMask is available for free. It is compatible with all Ether-based tokens, including side chains and Layer 2 tokens such as Polygon and Binance Smart Chain (BSC). MetaMask may not be suitable if you want to buy NFTs on other blockchain networks because it only supports Ether and Ether-based tokens.
Trust Wallet is yet another simple wallet that provides one-click access to NFT applications. This includes games like OpenSea, Axie Infinity, MyCrypto Heroes, and others. Furthermore, it supports a variety of blockchains, including Binance Smart Chain, Ethereum Classic, ThunderToken, Calisto, and TomoChain. It also includes a cryptocurrency exchange.
Regrettably, it is only available as a mobile app. Furthermore, Trust Wallet only allows you to store and manage your NFTs; transferring is impossible.
While the examples above are software or hot wallets, you can store your NFTs in hardware or cold wallets. These are physical devices that keep your digital assets offline, also known as cold storage. These are typically analogous to an external drive that is not connected to the internet. To gain access to your assets, you must first connect the hardware wallet to your online device.
You no longer need to store your NFTs on online servers with hardware wallets. As a result, cold wallets are far more secure than software wallets—you won’t have to worry about someone hacking into your online devices. Even if criminals steal your wallet, they will require your private key in order to transfer your assets. Furthermore, in the event of a theft, you have the option of restoring your coins to a brand new wallet.
As a result, while hardware wallets are less accessible than software wallets, they are more secure and appealing to those who prefer to keep their assets off the internet. Ledger is one such example, with products such as the Ledger Nano S and Ledger Nano X.
Ledger is a well-known hardware wallet provider, as well as the inventor of cold wallets. A Ledger hardware wallet stores your private key in a certified secure chip that only you have access to. According to reports, Ledger is the only hardware wallet that has been certified for security by the French cyber security agency, ANSSI.
Choosing a crypto wallet is not an easy decision, and it should not be taken lightly. However, it will allow you to store and eventually spend your cryptocurrency coins securely. Expect a lot of reading and some trial and error, as you may not find your perfect match on the first try. Regardless, we hope this guide was helpful and provided all of the necessary guidance and basic understanding.